by Froma Harrop
The Spokesman-Review

Social Security is a glossy piece of paper on which nearly every politician wants to finger-paint an agenda. But Social Security has no need of ornament. It is a very grown-up program. Put some other toy into the political playpen.

Come January, for the first time since 1975, Social Security payments will not be ratcheted upward for inflation. The reason is simple: no inflation.

But now President Barack Obama is pushing Congress to send every senior a $250 check to compensate for … for … for what? For the fact that some Social Security recipients expect a “raise” every year, whether or not it is warranted? They saw a 6 percent hike in their benefits last year. But that was not a “raise.” It was a cost-of-living adjustment to maintain (not increase) the buying power of their monthly checks.

If the president wants to hand out checks to stimulate the economy, why make them age-specific? Money sent to low-income people, whether young or old, would make far more sense. And the still better stimulus is government spending on roads and other worthy projects. That money gets shot right into the economy.

Sending an extra check to Social Security beneficiaries is also about pandering to older voters. But politicians should first ask themselves, “How many other Americans got 6 percent ‘raises’ last year?”

There is another proposal to cut payroll taxes. The plan is foolish and reckless – and has drawn bipartisan support. These taxes pay for Social Security and Medicare. Cutting payroll taxes puts those programs in jeopardy, which is why some liberal economists, such as Robert Reich, should hang their heads in shame for wanting to monkey with them.

On the right, meanwhile, there is growing affection for the idea. First off, many conservatives hold that cutting taxes solves all problems. (That did wonders for the deficit, didn’t it?) Secondly, fooling with payroll taxes could undermine the public’s faith in Social Security by lending ammo to the false charge that the program’s trust fund is all a fraud.

You see, the Social Security taxes now paid by workers and their employers support current beneficiaries. What’s left over goes into the trust fund to be tapped in future years, when a surge in retirees puts pressure on the program. It’s been a conservative talking point that the Social Security trust fund doesn’t exist; the government has spent the money.

Not quite. The Treasury bonds in the trust fund are real IOUs representing real money taken from real workers for more than 25 years. No matter what the federal government did with that borrowed money, it still has to pay it back.

Make the argument, if you must, that the Treasuries sitting in the trust fund’s file cabinets are not like the super-safe government securities traded around the world – that the Treasury doesn’t have to make good on them. The truth is that these special Treasury bonds are different, but they still cannot be defaulted upon without a vote by Congress.

So here’s an assignment for anyone who calls the trust fund’s Treasuries “worthless pieces of paper”: Find me one member of Congress, Republican or Democrat, who vows to vote against Washington’s promise to honor them. I’ll buy lunch.

According to the Social Security trustees’ latest report, payroll taxes will cover all of the retirees’ promised benefits until 2016. After that, the trust fund can make up for any shortfall until 2039. That is 30 years from now. We can worry about Social Security’s finances in 20 years.

You know what children with paint want to do with a clean sheet of paper? They want to mess it up. Social Security is a clean program. Let’s keep it that way.

Froma Harrop is a columnist for the Providence Journal.

by Cal Thomas
The Spokesman-Review

“That’s just the way it is. Some things will never change …” (Bruce Hornsby song lyric)

The Washington Post headline sounds as if a comedy writer, or someone fluent in George Orwell’s “Newspeak” wrote it: “Record-High Deficit May Dash Big Plans,” it said.

As if a contributing factor to the projected record-high deficit of $1.4 trillion has nothing to do with big spending by this and previous administrations. Is there no end? Will we ever reach a limit where government says, “no more, we’ve done enough; you’re on your own now”? Apparently not. The “greatest generation” mostly lived within their means. They knew what it meant to go without all but essentials. Today, we think the sky is the limit when it comes to spending and that if we can conceive it, then we are entitled to it.

This is partly because of how dysfunctional Washington has become and partly due to our own sense of “what we are owed.” Government can spend, tax and do whatever it wishes. If you oppose what it does, you are a selfish, greedy, rich elitist who cares nothing about people less fortunate than yourself. But wait. Did we have fewer poor people before government stepped in to “cure” poverty? Do we have fewer now? We aren’t sure if the war in Afghanistan can be won, but we know the war on poverty was lost. Once, the prospect of an empty stomach motivated most people to get up and start chasing opportunity. Today, people can do whatever they want and government will bail them out with a welfare check (for the poor) or a corporate welfare check (for the rich). Bad decisions? No problem. Failure is no longer an option.

Thomas, you are such a racist and an uncaring person. You’ve been lucky and should have to pony up for the less fortunate.

How about showing the “less fortunate” the way to become fortunate? Does anyone hear a politician in either party encouraging people to do for themselves, instead of relying on government? And that goes for big corporations, too.

People who play by the rules, stay in school, refuse to take drugs, marry before having children, and stay married, are no longer considered worthy role models by government, which has no intention of making them the norm. These norms have disappeared in a cloud of diversity and political correctness. Government now proposes to transform health insurance and tax responsible citizens at increased rates to pay for the votes, uh, benefits of others who are more content to take slices of other people’s pies rather than learn to bake their own.

If you have been an honest businessperson and give money to your church and charities to help others who want to succeed but are having difficulty doing so through no fault of their own, that no longer matters. In fact, government proposes to reduce the deductibility of your charitable giving because government sees itself as more capable of charity than you.

That’s what the Obama administration’s proposal to send a $250 check to every senior citizen is about. Seniors won’t get a cost of living adjustment in their Social Security checks next year because the cost of living hasn’t gone up. But because seniors have become accustomed to an annual raise, the president apparently thinks by giving it to them anyway, he can buy their support for health care legislation that is not in their interest.

Washington’s attitude toward those who make right decisions for themselves so as not to become a burden to government seems to be, “Good for you, but because you made all those right decisions (‘right’ being a relative term, so the government will say they were right FOR YOU), we will penalize your decisions and your success and take the money you earned and give it to others who didn’t earn it because we want their votes so we can preserve our political careers.”

“Well they passed a law in ’64,

To give those who ain’t got a little more,

But it only goes so far.”

For government, it’s never far enough.

Cal Thomas is a columnist for Tribune Media Services.
Get more news and information at Spokesman.com

GOP Asked to Help Design Bill; $300 Billion in Tax Cuts Sought

By Paul Kane, Lori Montgomery and Shailagh Murray
Washington Post Staff Writers
Tuesday, January 6, 2009; A01

President-elect Barack Obama arrived on Capitol Hill yesterday and immediately set to work reassuring skeptical Republicans about his massive economic stimulus package — part of a campaign that earned him praise for seeking their input but questions from those averse to hundreds of billions of dollars in new spending.

Pitching a plan that is expected to include $300 billion in tax cuts, Obama pledged to consult Republican leaders, who until yesterday had been left out of negotiations between the president-elect’s advisers and congressional Democratic staff.

“The monopoly on good ideas does not belong to a single party. If it’s a good idea, we will consider it,” Obama told House and Senate leaders at an hour-long closed-door meeting, according to one attendee.

Obama, making his pitch two weeks before taking office, won generally favorable reviews from GOP leaders, particularly because of his decision to increase the tax-cut ratio to 40 percent of the overall package.

Senate Minority Leader Mitch McConnell (R-Ky.) and House Minority Leader John A. Boehner (R-Ohio) told reporters they were convinced that Obama was sincere in his invitation to let Republicans help craft the nearly $800 billion package to create jobs and lift the nation out of recession. But they also expressed concerns about the size of the package, as well as particular elements under discussion between Obama and Democratic lawmakers.

“I remain concerned about wasteful spending that might be attached to the tax relief. Simply put, we should not bury future generations under mountains of debt,” Boehner said.

Boehner suggested the legislation would likely be signed into law by mid-February, but the president-elect said yesterday that he would like the House and Senate to present him with a bill by the end of January or beginning of February.

“The economy is very sick,” Obama said. “The situation is getting worse. . . . We have to act and act now to break the momentum of this recession.”

As described by his advisers, Obama is proposing a package of tax cuts to benefit families and businesses. Like the overall spending proposal, the tax cuts would be designed to put cash in people’s pockets over the next two years and kick-start the economy.

Working families would be eligible for a tax credit worth up to $1,000. Individuals would be eligible for a $500 credit.

Businesses would get an extension of expired tax breaks from the 2008 stimulus package signed by President Bush, including a “bonus depreciation” break that allows businesses to write off more of their purchases more quickly and an increase in small-business expensing limits. Businesses could apply current losses to taxes paid back as far as five years ago, reaping an immediate cash windfall. And they would receive a $3,000 tax credit for every job they create or preserve.

Key details of the stimulus proposal remain unresolved. For instance, upper-income individuals would not be eligible for the income tax credit, but the income threshold for phasing out the benefit has not been set. Obama officials said it would likely be about $200,000 a year, the range set during the campaign.

Obama officials said they tried to keep the package ideologically neutral, rejecting an option supported by many progressives to make people who are not working eligible for a “refundable” tax credit. And they passed up conservative provisions such as estate tax relief and capital gains tax cuts that disproportionately benefit wealthier individuals.

After a lunchtime session with his economic advisers, Obama rejected suggestions that the tax cuts were designed to win over GOP votes. “The notion that me wanting to include relief for working families in this plan is somehow a political ploy, when this was a centerpiece of my plan for the last two years doesn’t make too much sense,” he told reporters.

Some prominent Republicans expressed reservations about the tax proposals’ specifics. Jon Kyl (Ariz.), a member of the Senate Republican leadership team, said he hadn’t studied the list of proposed cuts, but that he favored reducing corporate and capital gains taxes, and providing more generous small-business incentives. And, he said, “These changes should be permanent, rather than just temporary.”

Sen. Charles E. Grassley (Iowa), the senior Republican on the tax-writing Senate Finance Committee, said he would prefer a tax package that is “inclusive rather than exclusive” and that offers relief to “as many as taxpayers as possible.” One option, according to a senior Grassley aide, would be to include a $75 billion provision to prevent the alternative minimum tax from applying to millions of additional families.

It is also not clear that tax cuts are the most effective way to win GOP votes. Two key Republican moderates in the Senate — Susan Collins and Olympia J. Snowe, both of Maine — have not focused on tax breaks as the best solution to the economic crisis.

In a letter to Obama last month, Collins outlined her stimulus priorities as transportation construction projects, energy-efficiency investments and a temporary increase in Medicaid assistance to states. In conversations with Obama and his Treasury secretary-designate Timothy F. Geithner, Snowe has urged the inclusion of unemployment assistance, mortgage relief for strapped homeowners and programs to ease the credit crunch facing small businesses.

“With more than 10.3 million people currently out of work, Congress must swiftly enact economic recovery legislation that will create jobs, assist the unemployed and reduce the devastating rate of home foreclosures,” Snowe said.

Obama bounced across the Capitol yesterday to take part in three meetings, beginning with a one-on-one meeting with House Speaker Nancy Pelosi (D-Calif.) in the morning and a sit-down in the early afternoon with Senate Majority Leader Harry M. Reid (D-Nev.). The final meeting was with the bipartisan leadership from both chambers.

Democrats described the atmosphere as markedly different than the confrontational tone of recent battles with the Bush White House, in part because the new administration is run by former senators.

“They understand the Senate, they understand the Capitol. It wasn’t as if someone new was coming to town,” Sen. Richard J. Durbin (D-Ill.), the majority whip and close Obama ally, said afterward.

Some Republicans, while saying they were pleased by Obama’s attempt to open dialogue, questioned whether the spending side of the plan would be transparent enough. Rahm Emanuel, Obama’s chief of staff, pledged to put details of the spending plan online, including the creation of a monitoring system for the progress on some of the projects, according to one attendee.

Some independent analysts joined GOP aides in questioning Obama’s tax credit for job creation, saying it’s unclear how such a provision would be crafted.

“When somebody lays off 10,000 people but hires back 1,000, should they get a tax credit? That doesn’t really seem fair,” said Leonard Burman, a director of the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution. “The problem with these things is defining what qualifies.”

Meanwhile, some Republicans and moderate Democrats are pushing Obama to commit to addressing the nation’s long-term budget problems even as his stimulus package pushes the government deeper into debt. With congressional budget analysts expected to announce later this week that this year’s deficit is likely to soar well over $1 trillion, a commitment to reducing future deficits is critical, said Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee.

“At some point here, you have to pivot and face up to these long-term problems,” said Conrad, who along with Sen. Judd Gregg (R-N.H.) is proposing a commission to re-examine the expensive entitlement programs Social Security, Medicare and Medicaid.

In a Florida Retirement Community, Residents Are Uncharacteristically Split

By Anne Hull
Washington Post Staff Writer
Wednesday, October 15, 2008; A01

SUN CITY CENTER, Fla. — The sign over the woodworking shop says “Sawdust Engineers,” and there was a time when the men now bent over the tools used to put on ties or make sales calls, building their pensions so they could one day leave the rat race for this warm world of unbroken sunshine.

“Retirement is the best!” says Jerry Decker, 73, one of the Sawdust Engineers tinkering in the wood shop at this over-55 retirement community of 19,000 residents outside Tampa.

But the tranquillity of palm trees and wine gatherings that sustained Decker’s dreams all those years in the snow has been upended by the financial crisis. Even here in paradise, nothing is for sure anymore.

“Who isn’t afraid of getting a ‘Dear John’ letter from GM saying your pension is in danger?” he asks. “You look at all these companies and what they are doing. We worked so hard to put them first, and it’s just not right for them to be reneging.”

The other men share the outrage, spitting out the names of corporations and their golden parachutes and lavish indulgences.

“I wasn’t invited to the AIG spa weekend, were you?” one asks aloud. “You didn’t get the manicure?” another asks.

“If we ran a household like they ran their company, you’d be bankrupt in five months.”

The Sawdust Engineers should be an easy sweep for Republican presidential nominee John McCain. All five are Korean War veterans and registered Republicans. George W. Bush nailed every one of their votes. But three weeks before the election, only three of them are supporting McCain.

Sun City Center is in the hard-fought electoral quadrant in Florida known as the I-4 corridor, home to 43 percent of the state’s voters. The Republican Party has always counted on the retirees here to deliver in bulk, but this year a more severe calculation is at play. To win Florida, McCain needs to capture a bigger slice of older voters than President Bush won in 2004 to offset the high numbers of young voters supporting Democratic Sen. Barack Obama.

“I’m ready for a change,” says Ed Bearer, a retired public school teacher from Delaware who recently received a letter saying his wife’s medical expenses may no longer be covered under his pension plan. “McCain turns me off. I can’t explain it,” he says. He’s voting for Obama.

That leaves Jerry Decker. Last week, during the second presidential debate, Decker kept waiting for McCain to come out swinging. “What he should have said was ‘We’re going to prosecute AIG to the fullest extent,’ ” Decker says. Instead, only vague promises to clean up corruption.

It’s easy to see why Decker wants more heat from a candidate when his own steady discipline is compared with the reckless indulgence of Wall Street. For years, Decker brown-bagged his lunch, even when he went over to the corporate tower as a director of human resources for Formica Corp. His wife, Jeannie, was his barber. The Deckers had one son and the family lived fully but frugally: They were the ones on the side of the ski mountain with their lunch and cans of soda packed from home. Jeannie watched the budget, and for more than two decades she gave her husband $25 each Friday for his weekly spending money.

“It wasn’t a sacrifice,” Decker says. “We had a game plan to spend our retirement together.”

But the game plan for many of the couple’s friends at Sun City Center has been jeopardized by the financial meltdown. Decker hears the stories in the wood shop. Guys who took their company’s advice and converted their pensions to 401(k) plans only to watch their holdings diminish by half when the market plunged. Jeannie tells him that some of the women are skipping their weekly trips to the beauty parlor and letting their hair go gray. More people their age are bagging groceries at the nearby Publix supermarket, and foreclosure signs, once unthinkable, are popping up in the trim Bermuda grass.

“I still believe in our country,” Decker says. “But Jeannie and I don’t have time to rebound. When you are 72 and 73, you don’t have time to recoup.”

‘A Nice Legacy for Our Kids?’

The storefronts at the strip plazas serving Sun City Center say it all: pulmonary clinics, laser surgery, Beltone hearing aids, oxygen tank rentals, a Bob Evans and numerous pharmacies. Retirees zip around in golf carts, many of them outlandishly customized, including one that looks like a giant sombrero, complete with fringe. But spare these folks the Florida retiree jokes — they’ve heard them all. Giving a tour of the aquatic facility, information director John Bowker mentions that four seniors have died in the Jacuzzi. “The most common sound around here is an ambulance,” he says.

Once a solid hub of conservative retirees from the Midwest, Sun City Center has in recent years been set upon by newcomers who make for a less cohesive voting group — “liberal Northeasterners,” says Dee Williams, president of the Sun City Center Republican Club since 1991. In other words, blue-staters.

The influx of Democrats and McCain’s tepid style of campaigning have Williams concerned enough to shoot off SOS e-mails to the Florida Republican Party warning that her turf cannot be taken for granted. “McCain is not bringing passion,” says Williams, 80, sitting in her living room of blue sofas. “He has to convey to the public that what we are doing with the bailout, we had to do.”

In her Missouri twang, Williams makes a direct appeal to her candidate: “You better get off your duff and show some fire. Send Sarah [Palin] and her husband to Michigan. If you are going to give up Michigan and you lose Florida, you lose.”

The same morning Jerry Decker and the Sawdust Engineers are tinkering in their wood shop, a group of women called the Weavers are at their looms elsewhere in the activities center expressing ambivalence about McCain.

“He’s flat, he’s old, he doesn’t seem enthused,” says Jane Bolder, 69, a registered independent who twice voted for Bush because of his tax policies. Voting for McCain, she says, would be a no-brainer if he had picked Sen. Joseph I. Lieberman as a running mate instead of Alaska’s Gov. Palin. “I can’t imagine sending Palin, with her cliches, et cetera, to negotiate or meet with leaders of other countries,” she says.

Obama has struggled to capture older white voters, and Bolder epitomizes their hesitance about him. “He has pizazz, but he has a lot of plans to spend a lot of money,” she says. “The health plan is more geared toward government control. He wants to raise capital gains taxes. Where is the money going to come from to pay for health care?”

Outside, the aqua aerobics class is full tilt with women in water wings dancing to Abba’s “Mamma Mia” while golf carts are nosed up to the state-of-the-art gym. The computer room is packed. Bridge starts at 2. To write off this population as a monolithic voting bloc is a mistake: Ages here range from 55 (known as the “babies”) to 95. They TiVo, they download, and most important, they are inveterate consumers of information.

The one common experience that sears the majority here is the Great Depression. The tanked economy has transcended their usual single-issue focus on health care or Social Security. They are worried, even mournful, about the country that is being passed on to their children and grandchildren. The surface anger is directed at reckless corporations and lack of oversight, but the deeper emotions eventually come out.

“Our debt is in the trillions,” Decker says. “Is this a nice legacy for our kids? We’re worried about our granddaughter, the kind of medical care she’ll have. Will there be a Social Security for her? Will there be pensions?”

It’s 4:30 in the afternoon, and the Deckers are having their ritual glass of wine when Jerry leaps up from a chair in the living room and points out the sliding glass door. “Look at that gator!” he shouts. “He’s on the sixth fairway!” A 10-foot alligator is walking toward the lake.

The couple steps outside. “Oh, look, he’s gonna stop and see Betty,” Jeannie says.

The alligator pauses at lake’s edge next to a white bird. “Isn’t that majestic?” Jerry says, in awe.

The Deckers find everything about Sun City Center pretty majestic. They moved here from Delaware in 2005, and it was a long time coming. After they married in 1960, they put a plan together: save as much as possible so they could enjoy retirement. Jeannie was a registered nurse and Jerry worked for various corporations. Now they swim, fish in the Gulf of Mexico, line-dance, hit the Ringling Museum of Art and even ride the log flume at Busch Gardens.

Both voted for Bush but felt somewhat duped when no weapons of mass destruction were found in Iraq. “Being an old Army guy, I remember saying to Jeannie, ‘I hope he’s right, but we gotta support him 100 percent,’ ” Decker says. “Turns out the weapons weren’t so mass after all.”

The Deckers favor abortion rights and stem cell research, but restoring financial solvency is what matters most to them.

“McCain has that built-in integrity because of what he went through as a POW,” Jerry says. “But I wish he would have gotten on the bandwagon on the other issues — the golden parachutes — and come out swinging.”

And yet he is not ready to commit to Obama.

“First of all, his presence and rhetoric are marvelous,” Jerry says. “But once you get beyond that, what is there? I’m concerned with his associations in the past, the minister and ACORN.” Decker is referring to Obama’s former pastor, the Rev. Jeremiah A. Wright Jr., who cursed the nation from the pulpit, and the candidate’s work with the Association of Community Organizations for Reform Now that critics say pressured banks into lending money to unqualified low-income home buyers.

Meanwhile, a widow friend of the Deckers just learned that her husband’s benefits plan with a Big Three automaker is dropping her medical coverage.

“Doggone it, this was the agreement at the start, that we’ll take care of you,” Jerry says. “You didn’t mind working for 35, 40 years because you say to your wife, ‘Honey, we are gonna get all of these things in retirement.’ ”

The Deckers are better positioned than most. Eighteen months ago, when Jerry noticed the country’s debt shooting up and the glut of overpriced houses, he pulled their money from the stock market and invested in certificates of deposit and long-term annuities, a move that preserved their retirement savings.

Their glass of wine finished, they watch “NASCAR Now” as they do every weekday at 5 and then “Pardon the Interruption.” Jeannie makes a shrimp salad for dinner while the Florida sky turns pink.

By 6:30 the next morning they are headed out for their three-mile walk. The moon bounces off campaign signs in the cool grass. Back home they eat breakfast and Jerry becomes engrossed in an article in the morning paper about Hobson’s choice and the 2008 presidential election. “It means you have a choice between two undesirable options,” Jerry tells Jeannie. “That defines our dilemma perfectly.”

It’s ‘Scary What’s Going On’

As the Deckers clear away their breakfast dishes, Dee Williams is in another part of Sun City Center preparing to canvass for McCain. Armed with printouts of addresses of registered Republicans, the president of the local Republican Club hops in her golf cart and hits the gas.

“If Obama becomes president, I’m scared of the march down the road to socialism,” Williams says. Not that she has been that thrilled with Bush. “He didn’t know what a veto pen was. He didn’t have the guts to stop the spending habits.”

McCain is the only hope. She parks the golf cart in front of a peach-colored house with flamingos carved into the burglar bars. “I just love cul-de-sacs,” Williams says. A woman tentatively opens the door.

“I’m Dee Williams, your precinct chairman,” she says, handing the woman a McCain-Palin packet.

“It’s kinda scary what’s going on,” the woman says.

Williams offers encouragement. “Yes, we have to get out the vote,” she says.

Back in the golf cart, she recounts McCain’s appearance the night before at a campaign stop in Minnesota where he reassured a voter that Obama is not an Arab and that there is no reason to fear him.

“Why didn’t he say, ‘There’s no reason to be scared of him, but be scared of his policies’? ” Williams says. “My daughter Kim called and said, ‘I think this man is going into dementia.’ ”

Williams is disappointed that Palin bypassed Sun City Center on a recent swing through the Tampa Bay area for a rally at a public park in a neighboring county.

“Our people are too old to show up at some park and sit on the ground,” Williams says. “You can’t take our vote for granted. These people here are darned independent.”

She rings the bell of a house with a Jaguar in the garage and flowering jasmine wrapped around a lamppost. The woman who answers the door makes a grave forecast for the Republican Party:

“I’m for these guys, but I don’t think they’ll win.”

Trying to Decide

With his $25 allowance in his wallet, Jerry Decker takes the golf cart up to Home Depot. He whirs along the smooth roads, waving to friends, adjusting his baseball cap. Retirees used to move to Sun City Center and pay cash for their houses. Now mortgages are common; more than two dozen homes are in foreclosure.

When Jerry was a boy in the 1930s, his father told him that the bank had come for their furniture because of a missed payment of $2.50, and the lesson stuck with him: Don’t rely on the government and don’t rely on credit.

What he wants is a commander who will address the country and talk honestly. He and his wife will watch the third and final presidential debate and try to make up their minds. More pieces of the puzzle.

“Jeannie said it best,” Jerry says. “She said, ‘No one has stood up and said: I made a mistake.’ ”

He parks the golf cart outside Home Depot and inside he grabs some weedkiller before catching sight of a display of Eco-Smart light bulbs on sale. He looks at the box and checks the sign. “Six forty-five, that’s a pretty good price,” he says.

At the register, he greets the cashier. “Hello, young lady, can you keep me under $10?”

She smiles. “No, it’s $12.97.”

When he gets home, Jeanne is setting out their Saturday lunch: half a tuna sandwich each and sliced peaches. “Honey, I brought you a present,” he calls, coming through the garage door. “And these were on sale.”

Jeannie studies the light bulbs.

The purchase leaves Jerry with $12.03 for the week, but that’s his business. “I’ll make it,” he says. “Oh, sure.”

Staff researcher Julie Tate in Washington contributed to this report.

Jack Z. Smith
April 1, 2008

Former House Majority Leader Dick Armey once asked, “If Social Security is such a great program, why is it mandatory?”

Actually, Social Security is a great program precisely because it is mandatory. Ninety-six percent of American workers pay into the system. As a result, Social Security has a strong, steady flow of funding that has made it a tremendous safety net for the nation.

Along with Medicare, Social Security has played a huge role in slashing the poverty rate for the elderly from about 30 percent to less than 10 percent over the last 40 years.

This year, almost 50 million Americans will receive $608 billion in Social Security benefits. Nine out of 10 people 65 and older receive the benefits. Among the elderly, 52 percent of married couples and 72 percent of singles receive more than half their income from it.

If Social Security had not been made mandatory, there would be a much higher poverty rate among the elderly today. Many Americans wouldn’t put money into retirement savings unless required to, just as millions of workers today don’t participate in voluntary corporate 401(k) programs despite their attractive features.

The program’s benefits have served as a crucial financial lifeline for several of my relatives, including my maternal grandmother. As a widow in her twilight years, she scraped by with Social Security as her primary source of income.

Social Security has been on my mind because its trustees released their annual report last Tuesday on its projected long-term funding shortfall.

Although the program currently is generating surplus revenues, its cost is projected to exceed incoming revenues by 2017 as more baby boomers hit their rockers. By 2041, the trust funds are projected to be exhausted, leaving incoming payroll tax revenues to pay only 78 percent of benefits.

But if we make some adjustments, the program can be put on a sound financial footing for many decades to come.

That probably will require increasing payroll taxes and some very modest, gradual reductions in benefits. Congress adopted bipartisan Social Security reform legislation 25 years ago and can do so again.

The payroll tax is levied only on the first $102,000 of annual income. That cap could be boosted appreciably, perhaps to $150,000 or $200,000, and indexed to inflation. Even if the cap were $200,000, affluent people earning more than that still would pay a smaller percentage of their income into Social Security than do low- and middle-income workers.

The payroll tax rate, now 12.4 cents per $1 of earnings (half from workers, half from employers), could be raised modestly – perhaps a half-cent.

Some benefit cuts might be made. For example, the age for receiving full retirement benefits might be raised very slightly and very gradually, because people are living longer.

Several million state and local government employees currently not paying into Social Security might be brought into the system, as federal employees were in 1983.

Greater protection should be provided to the trust funds to ensure that Congress and the White House stop (or at least greatly decrease) the shortsighted practice of spending surplus Social Security revenues for other government programs.

President Bush’s departure from the White House in January could ease congressional passage of bipartisan legislation to strengthen and preserve Social Security for future generations. The sooner that strong legislation is adopted, the less severe the remedial measures must be.

If you don’t believe me when I say that this is a worthy program, you might recall Bush’s words on May 15, 2000, in Rancho Cucamonga, Calif., when he was campaigning for president. Social Security, he said, is “the single most successful government program in American history.”

(Ms.)Froma Harrop

March 31, 2008

The stock market hasn’t been this nasty since the 1970s. House prices continue their dive, and consumer confidence has gone splat. The rocketing federal budget deficit will probably orbit Mars by the time the government finishes cleaning up the mess left by the housing bubble it so blithely let fester.

Good job, fellas. The Bush administration doesn’t have a heckuva lot of credibility left on economic matters. But some members think they have one little ideological game left to play. Scare people out of their wits about Social Security.

For Americans up to their eyeballs in debt – or whose dreams of leisure rested on rising house prices – Social Security remains a star of stability in the rising gloom. Fortunately, Social Security is doing just fine.

But the financial geniuses in the Bush administration still want to mess with it. And the only way they can stampede the public into doing something stupid to Social Security is to portray the program as a very sick patient needing to be saved.

Economist Dean Baker has spent long years trying to save Social Security from its would-be surgeons. A founder and director of the progressive Center for Economic and Policy Research, Baker continually tracks the tireless efforts to undermine confidence in the program – often helped by liberals swept up in the phony panic.

Consider the comments following the Bush administration’s new report on Social Security and Medicare. “In fewer than 10 years,” Treasury Secretary Henry Paulson warns, “cash flows are projected to turn negative – meaning that we will draw upon general revenues to support withdrawals from the (Social Security) Trust Funds in order to pay current benefits.”

Paulson is referring to 2017, when Social Security payroll taxes may no longer be able to cover benefits owed retirees. To keep the program on track, he says, the tax may have to be raised or the benefits cut.

“I think this is really dishonest,” Baker told me. “2017 means zero to the program.”

True, the government must dip into the Trust Funds – which hold the Social Security surplus – in 2017. “But that’s the reason we built up the surplus,” Baker notes.

“When we got to 1982, the thing was literally out of money,” Baker recalls, “but no one missed a check.” Congress and the Reagan administration responded by raising the Social Security payroll taxes and starting to save for the future challenge. Enough money now sits in the Trust Funds to get us to 2041, the program’s trustees report.

That the government would someday have to “support withdrawals from the Trust Funds” hasn’t been a secret for 25 years. Nor is this merely a matter of Americans repaying themselves, as many conservatives argue.

The money in the Trust Funds, Baker notes, came from the very regressive payroll tax on workers. The general funds that support the withdrawals come from the very progressive income taxes – which also cover investment income.

What should we do about Social Security?

“I would just say, ‘Let’s sit on this,’ ” Baker answers. If come 2030 Americans see problems looming, he adds, “we can do something.”

Much could change in over 20 years. Productivity gains have helped fewer workers pay for more retirees in the past and could in the future. And longer life spans may also alter the dynamics.

“How long into their lives should someone born in 2020 work?” Baker asks. “I have no idea.”

If politicians want to agonize over retiree benefits, they have their hands full with Medicare. Paying for that program will be a bear of a problem. But they should keep their paws off Social Security.

Presidential candidates, please take note.

Cal Thomas
Tribune Media Services
March 24, 2008

We’ve all seen or heard about them. Perhaps they are friends or family members who have demonstrated financial irresponsibility: a college student who has a budget and quickly exceeds it on wild partying; a cousin or best friend who asks for a “loan” and then never pays it back; people whose credit cards are maxed out and they can’t afford the finance charges.

Government behaves similarly, playing any or all of those roles. It now resembles an irresponsible parent, spending the children’s wages and inheritance as if there were no tomorrow. Republicans lost the spending issue – and their congressional majority – because they behaved like overspending Democrats. Now Democrats in the House are going the Republicans one better. They are promising to increase spending should they win the White House and maintain their congressional majority.

According to an analysis of the fiscal 2009 House Democratic majority’s federal budget by Brian Riedl of the Heritage Foundation, ( www.heritage.org), every American household would pay on average $3,100 more in federal taxes. That amounts to $1.265 trillion more over five years and $3.911 trillion over 10 years. Worse (if that’s possible), the Democratic budget proposal increases discretionary spending by 8 percent and does not eliminate even one wasteful program. It also ignores the coming explosion in the cost of Social Security, Medicare and Medicaid.

None of these increases will be paid for by “soaking the rich” with new tax increases. That means more borrowing from countries that don’t have America’s best interest as a priority, more inflation and a weaker dollar.

The spending virus has so permeated Congress that members won’t even go on the wagon during an election year. The bipartisan DeMint-McCaskill budget amendment that would have required a one-year moratorium on earmarks was soundly defeated 71-29. This is how little respect most members have for those whose money they take through taxation, spending it like frat boys on a weekend bender.

The Washington Examiner newspaper determined that the longer someone serves in the Senate, the more likely they are to favor spending more money and to oppose any suggestion that they stop. According to the Examiner, “the average seniority of senators voting for DeMint-McCaskill was 12 years, while opponents averaged 22 years in the Senate.” All three presidential candidates returned from the campaign trail to vote for the measure. Sen. John McCain is far more credible on spending reductions than Hillary Clinton or Barack Obama and the moratorium was about slashing earmarks, not the big-ticket items most in need of reform, but getting any politician on record favoring spending reductions (and then following through to see if they mean it) is worth something.

This year, according to Heritage, the federal government will spend $25,117 per household.

The excuse one hears most often is that there is no place legislators can cut spending.

Really?

Last year, says the Heritage Foundation, the government made at least $55 billion in overpayments; the Pentagon spent almost $1 million shipping two 19-cent washers from South Carolina to Texas and $293,451 sending an 89-cent washer from South Carolina to Florida. Even the coming postal rate increases aren’t that high.

Washington spends $60 billion per year on corporate welfare compared with $50 billion on homeland security. Suburban families are receiving large farm subsidies for the grass in their backyards, subsidies that many of these families never requested and do not want. More than half of all farm subsidies go to corporate farms with average household incomes of $200,000.

And then there is my personal favorite: Government auditors spent the last five years examining all federal programs and found that 22 percent of them – costing taxpayers $123 billion per year – fail to show any positive impact on the populations they serve.

This is outrageous. That our elected officials participate in this sham and then claim they can’t afford to cut anything ought to disgust us all, especially when some are planning to spend even more. It demonstrates that a government program is proof of eternal life in Washington.

Presidential hopeful sees chance to save Social Security

Libby Quaid
Associated Press
December 15, 2007

BOSCAWEN, N.H. – Republican presidential hopeful Mike Huckabee said eliminating federal income taxes in favor of a national sales tax would help save Social Security – an odd pitch in a state where residents pay no state income or sales taxes.

“Instead of basing our national budget off of payroll taxes for Social Security … it means the base of funding is much broader,” said Huckabee, whose shoestring campaign has surged nationally and in Iowa, which holds caucuses five days before New Hampshire’s Jan. 8 primary.

“That’s important because we have a declining number of people who actually live by their wages,” the former Arkansas governor told workers at the Elektrisola plant in Boscawen, where workers make wires for electric guitars like those Huckabee plays, among other things.

The tax plan Huckabee has proposed, called the “FAIR tax,” would eliminate federal income and investment taxes and replace them with a 23 percent federal sales tax. The poor would pay no net sales tax up to the poverty level, and every household would receive a rebate equal to sales taxes paid on essential goods and services.

Even the backers of the tax admit it is unlikely to get through Congress, and other leading GOP candidates have been critical of the idea. And it’s a tough sell in New Hampshire, where residents do not pay state income taxes or general sales taxes. Scott Sweezey, a programmer at the plant who lives in Bristol, said he doesn’t know how to make a consumption tax treat people fairly.

“Low-income or retired would pay the same tax as somebody who has a million dollars,” said Sweezey, an independent. “I guess if you don’t buy anything, you don’t pay any sales tax, but if you do buy something, you pay sales tax.”

A grim future looms for Social Security, because as post-World War II baby boomers begin retiring, the system won’t collect enough taxes to pay for retirement benefits. The government likely will have to raise taxes or reduce benefits.

Neither solution is attractive, so presidential candidates in both parties avoid talking about them. An exception is Republican former Tennessee Sen. Fred Thompson, who proposes lower-than-promised benefits for future retirees as well as new private investment accounts.

Huckabee says replacing income taxes with a sales tax would also have the benefit of discouraging illegal immigration because people would be forced to pay taxes they’re not paying now.

Not everyone in New Hampshire dislikes the idea of a federal sales tax.

Ken Schuhle, a Navy veteran from Dover and a registered Republican, said it would eliminate loopholes that rich people exploit. “That way, everybody pays our share,” said Schuhle, who listened to Huckabee speak during lunch at the New Hampshire Veterans Home in Tilton.

Huckabee also named Republican political strategist Ed Rollins as his national campaign chairman. Rollins was national campaign director for Ronald Reagan in the 1984 presidential election, in which Reagan won 49 states except Minnesota, Walter Mondale’s home. At a news conference in Concord, Rollins promised his candidate would work just as hard in New Hampshire as in Iowa and South Carolina, states where large numbers of evangelical Christians are increasingly choosing Huckabee.

“I think we have an obligation, both to Mike Huckabee and his people and the voters of New Hampshire, to wage a full-scale campaign here and let people make up their minds on Election Day,” Rollins said.

Independents have not yet chosen a candidate, he noted: “We’re going to make a big attempt at getting those votes, and they’ll be the last voters to make up their minds.

By KAREN TUMULTY

Social Security has always been an issue that united the Democrats like no other. But suddenly, the most successful and popular government program in history is a subject of fractious debate in their party’s presidential primary. Barack Obama suggests that Hillary Clinton is refusing to engage in “a real, honest conversation” about the challenges that lie ahead for the program. And Clinton is accusing Obama of buying into “Republican scare tactics.”

At issue: Obama’s proposal to increase the taxes that wealthier Americans pay into the system. Currently, workers are taxed on only the first $97,500 of what they earn, a limit that will rise to $102,000 next year. Getting rid of the income cap, he says, would be enough to “virtually eliminate” the funding shortfall and guarantee the solvency of the system without cutting benefits. John Edwards would also increase the taxes but only on income over $200,000. And Clinton–well, she refuses to be pinned down on what, if anything, she would do with Social Security. Instead, she says she would put her emphasis on balancing the budget and appoint a bipartisan commission to figure out what to do with Social Security.

Turning it over to a commission is the kind of duck-and-cover drill that politicians have usually been able to get away with on Social Security. But Obama and Edwards aren’t going along this time. “We’re not really picking a fight about Social Security,” says Obama strategist David Axelrod. “We’re picking a fight about candor. [Obama] has been forthright about this, and Senator Clinton hasn’t.”

In Social Security, Obama believes he has found the perfect issue to demonstrate the transcendent brand of politics he offers. “We will not be able to solve this problem and protect Social Security for good until we stop treating it like a political wedge issue and instead unite Republicans and Democrats behind a sensible solution,” Obama wrote in an Op-Ed column in Iowa’s Quad-City Times.

But critics, including liberals who have allied with Obama on other issues, say any solvency crisis could be decades away. They accuse Obama of buying into the dire scenarios with which the Bush Administration tried–unsuccessfully–to partially privatize the system. New York Times columnist Paul Krugman went so far as to write that Obama had been “played for a fool.” Adds a Clinton strategist: “This whole conversation is bewildering. Every Democrat in America has spent the past several years arguing that Social Security is not in a crisis.”

All of this is going to be watched closely, especially in Iowa. Proportionally, the state has one of the nation’s oldest populations. In 2004, 64% of those who attended Iowa’s Democratic caucuses were over the age of 50. While much has been said and written about Obama’s appeal to younger voters, he is also gearing his campaign toward the senior set, even proposing to eliminate income taxes for older Americans making less than $50,000 a year.

As a campaign issue, Social Security has a treacherous history. The last time it figured in any substantial way in a Democratic presidential primary was back in 1992. Arkansas Governor Bill Clinton seized on a single passage in Massachusetts Senator Paul Tsongas’ campaign literature in which Tsongas floated the idea of holding down cost-of-living adjustments for entitlement programs. Bill Clinton declared that the idea proved Tsongas was an enemy of Social Security. He hammered that misleading charge in a barrage of negative ads and clinched the Democratic nomination. Candor in politics can carry a big price.

Darlene Superville
Associated Press
November 12, 2007

WASHINGTON – Democrat Barack Obama said Sunday that if elected he will push to increase the amount of income that is taxed to provide monthly Social Security benefits.

Obama and other Democratic presidential candidates previously have signaled support for this idea.

But during an interview on NBC’s “Meet the Press,” Obama said subjecting more of a person’s income to the payroll tax is the option he would push for if elected president.

He objected to benefit cuts or a higher retirement age.

“I think the best way to approach this is to adjust the cap on the payroll tax so that people like myself are paying a little bit more and people who are in need are protected,” the Illinois senator said.

Currently, only the first $97,500 of a person’s annual income is taxed. The amount is scheduled to rise to $102,000 next year.

Obama’s proposal could include a gap or “doughnut hole” to shield middle-income earners from paying more in taxes, he said.

Obama has tried to draw contrasts between himself and front-runner Hillary Rodham Clinton on Social Security, saying on the stump and in TV ads that she has dodged tough questions about its finances.

He said some tough decisions will be in order because Social Security is the most important social program in the country.

Clinton has said growing the economy will pump more money into Social Security’s coffers. She also has said she would create a bipartisan commission to recommend solutions.

Speaking on Sunday in Iowa, Clinton said she would move more carefully than her rivals on dealing with the looming shortfalls rather than raising the income cap.

“I know it may sound good at first blush,” said Clinton. “If you look at all the complexities of this, I think it’s much smarter to say: Look, we’re going to deal with the challenges by fiscal responsibility and we’re going to use a bipartisan commission. And we’re not going to do it by further burdening middle-class families.”

Social Security is projected to start spending more than it collects beginning in 2017, with its trust fund depleted in 2041.

Obama also invoked his friend, billionaire Warren Buffett, who Obama said has expressed concern that he pays less in Social Security taxes than anyone else in his office.

“And he has said, and I think a lot of us who have been fortunate are willing to pay a little bit more to make sure that a senior citizen who is struggling to deal with rising property taxes or rising heating bills, that they’ve got the coverage that they need,” Obama said.

David S. Broder
Washington Post
October 30, 2007

If I had the power to summon all 16 of the people running for president to one place, I would want them in a Senate hearing room for a session that is taking place Wednesday morning.

The hearing has been arranged by Kent Conrad of North Dakota, Democratic chairman of the Budget Committee, and Judd Gregg of New Hampshire, the Republican ranking member.

They have invited David Walker, the comptroller general of the United States and the head of the Government Accountability Office, an arm of Congress; William Novelli, the head of AARP, the senior citizens lobby; Rep. Steny Hoyer of Maryland, the House majority leader; and Leon Panetta, the former White House chief of staff, budget director and former congressman.

What brings all these worthies together is an effort to revive the idea of a bipartisan effort to head off the bankrupting of America by runaway entitlement programs.

They and others, including Treasury Secretary Hank Paulson, clearly see that unless ways are found to reform the financing and benefits of Social Security and Medicare, the demands imposed by the retirement of millions of baby boomers will consume the federal budget and blight the prospects of the next generations.

Because neither party can solve this problem by itself, Conrad and Gregg have proposed the creation of a bipartisan task force, whose recommendations to the president and Congress chosen next November would be guaranteed quick consideration.

The idea was greeted favorably by leaders of both parties in the Senate, and Paulson found support for it in the White House. But it has encountered criticism from the opposing flanks. Vice President Cheney objected publicly to any consideration of tax increases, and Speaker Nancy Pelosi threw cold water on the idea. Apparently, she does not trust the administration to deal fairly or she may want the Social Security issue saved for Democrats in the coming campaign.

So Conrad and Gregg backed off and decided to begin again – making the case, through expert testimony, that a policy of inaction, looking the other way, is dangerous to the country’s fiscal health.

As Gregg has noted, the first of the baby boomers filed for Social Security benefits this year – and millions more will soon follow. By most official estimates, Medicare and Social Security by 2034 will eat up 20 percent of the gross domestic product – equivalent to the entire federal budget of today.

To Gregg, that flashes a clear warning that “the next president, if he or she serves eight years, will find themselves in very dangerous waters. There is no way to support this system as it is constituted.”

Conrad, who says he inherited a fear of debt from his Depression-era ancestors in North Dakota, said he laments that the government has added $500 billion to the national debt this year, just as those boomers are starting to retire. “You see the dollar going down, and interest rates going up,” he said. “And there’s more to come.”

Neither man expects a quick fix – but both insist that delay is the most costly and wasteful strategy. The task force idea that they developed during a congressional trip to South America this past winter is an effort to assure all parties a voice – and a fair process.

It would have 16 members, equally balanced between Republicans and Democrats. Fourteen would be members of Congress, chosen by the leadership and presumably representing the major economic policy committees. Two would be from the administration, with one of them, the secretary of treasury, serving as chairman.

It would take 12 of the 16 votes to submit a report – guaranteeing each party a voice in the outcome. And the report would be translated into bill form and given a fast track to a final vote in both the House and Senate, with a requirement of 60 percent support for it to go to the president – again, protection for the minority.

Despite all these safeguards, neither Cheney nor Pelosi is satisfied, and without their backing, its prospects seem dim. But the issue will haunt the next president – unless at least the first steps to deal with it are taken now.

That is why those candidates ought to be at this hearing.

Congress, creating yet another entitlement, is not at all inhibited by the Law of Holes, which is: When you are in a hole, quit digging.
By   George F. Will
Newsweek Last Thursday was 96 days before DD-Day, the day the Demographic Deluge begins. That is Jan. 1, when the first of 78 million baby boomers reach 62, the age at which a majority of Social Security recipients begin to receive that entitlement. Social Security is unsustainable as currently configured, but is a picture of health compared with another middle-class entitlement, Medicare.

On Thursday, the Senate, following the House, voted to create another open-ended middle-class entitlement. Congress is not inhibited by the Law of Holes, which is: When you are in a hole, quit digging.

Although it is the elderly who are devouring the federal budget—and through it, a huge share of the economy’s future production—the State Children’s Health Insurance Program is (mostly) about children, at least ostensibly. But it also is about a deep divide between the parties.

The struggle over SCHIP is an unusual Washington dust-up—one that actually is as portentous as Washingtonians, with their flair for (self)dramatization, say it is. It is a proxy fight over the future of the welfare state, meaning the trajectory of government and the burdens it will place on the economy, which, by its dynamism, must generate the revenues to pay the bills.

SCHIP was created in 1997 by a Republican-controlled Congress. Today’s Democratic-controlled Congress wants to transform its mission. It began as a program whereby the federal government would subsidize state governments in providing health insurance for children from households not poor enough (generally 200 percent above the poverty line) to qualify for Medicaid but not affluent enough to afford to buy insurance. Were it to become law, the new SCHIP would be a long stride toward unlimited federal funds working as incentives for states to expand eligibility to more and more affluent families.

It would immediately include some with incomes 400 percent of the poverty line ($83,000 for a family of four). Over time, its “mission creep” would continue. Mike Leavitt, secretary of Health and Human Services, says that the new SCHIP would enroll 2.8 million more children, but 1.1 million of them would be from families for whom SCHIP had become an incentive to drop their private insurance. To that, some liberals say, sotto voce: Good.

Why? In the perennial tension between the competing values of freedom and equality, conservatives favor freedom, which inevitably increases unequal social outcomes. Liberals’ mission is the promotion of equality, understood as equal dependence of more and more people for more and more things on government.

Liberals increasingly define the public good in terms of the multiplication of entitlements. Conservatives increasingly understand their mission as the promotion of attitudes and aptitudes they think are weakened by that multiplication.

The president proposed a $5 billion increase for SCHIP over five years. In a familiar Washington folk dance, the Senate voted a $35 billion increase, and the House endorsed a $50 billion increase but receded to the Senate sum, which was therefore declared moderate. The increase supposedly would be funded by a 61-cent increase in the cigarette tax.

So, this health legislation depends on a constantly large and renewable supply of smokers—22 million new ones. This “progressive” measure requires a regressive tax (smokers are predominantly and increasingly lower class) levied to expand subsidized health insurance ever upward into the middle class.

The president proposes a plan to give everyone personal ownership of fully portable (not tied to employment) health insurance policies—tax deductions of $7,500 for individuals and $15,000 for families purchasing policies. Liberals complain that this would be an incentive for employers to stop providing coverage. To which conservatives respond: Good.

They say: If we can disentangle health care from the wage system, General Motors can go back to being a car and truck company rather than a health-care provider unsuccessfully struggling to sell cars and trucks fast enough to pay employees’ and retirees’ medical expenses. Some liberals want to preserve the entanglement until business clamors for government to nationalize the one seventh of the economy that is health care.

For philosophic reasons, Democrats wish the bill would become law. For political reasons, they welcome the president’s promised veto, which will preserve for them the issue of Republican beastliness toward “the children.”

It has become a verbal tic for politicians to say that everything they do is “about the children.” This rhetoric of pathos reflects the de-intellectualization of public life—the substitution of sentimentalism for reasoned persuasion. Bill Clinton carried this to comic lengths when, in his first State of the Union address, he noted that “not a single Russian missile is pointed at the children of America.”

Those children-seeking missiles were diabolical. The new SCHIP, which would expand the dependency of middle-class children on government, is not diabolical, but neither is it just “about the children.”
Copyright (c) 2007 Newsweek, Inc.